Tag Archives: benefits cap

Government plans to cap the annual amount spent on social security – including key disability benefits – have been criticised by disabled campaigners.

The Conservative chancellor, George Osborne, announced in this week’s budget that the spending cap would be set at £119.5 billion in 2015-16, and would then rise with inflation to reach an expected £126.7 billion in 2018-19.

The welfare cap seems to me one of the biggest policy issues in the budget.

Of course it is designed as a bear trap for Labour. In practice I cannot see how any Chancellor thinks they will ever cap the increase in social security payments to a limit that may be lower than inflation and which makes no consideration for population change or ageing. What struck me though from the budget report was just how all embracing the new cap will be:

The Jobseekers Allowance and old-age pension may be excluded, but otherwise just about every benefit is covered.

The welfare cap seems to me one of the biggest policy issues in the budget. Of course it is designed as a bear trap for Labour. In practice I cannot see how any Chancellor thinks they will ever cap the increase in social security payments to a limit that may be lower than inflation and which makes no consideration for population change or ageing. What struck me though from the budget report was just how all embracing the new cap will be:

The Jobseekers Allowance and old-age pension may be excluded, but otherwise just about every benefit is covered.

The government faces new questions about its commitment to supporting disabled people, after the chancellor announced details of a new cap on benefits spending, and then failed to assess its likely impact on disabled people.

Although some campaigners dismissed the cap – which will be introduced from 2015 – as a “gimmick”, the move has been seen as another assault on disabled people’s income.

In the disability section of the equality analysis, it mentions increases in spending on mental health treatment, the government’s special educational needs reforms, money spent on improving access to the railway system, NHS spending, disability employment programmes, and even funding for Paralympians.

But there is no mention of the welfare cap, other social security measures announced in the spending round – presented to MPs this week by the Conservative chancellor, George Osborne – or cuts of 10 per cent to local government spending.

The spending round sets out how the government plans to allocate £740 billion of public expenditure in 2015-16, and how it will split £11.5 billion in cuts between government departments.

Osborne made it clear to MPs that the new cap on welfare spending would include expenditure on disability benefits, such as disability living allowance and the new personal independence payment, as well as housing benefit.

The Treasury has yet to clarify with Disability News Service (DNS) whether the cap would also include spending on employment and support allowance (ESA) – the new out-of-work disability benefit – although Osborne said it would exclude benefits that “directly rise and fall with the unemployment rate”, which is likely to include jobseeker’s allowance (JSA).

It is unclear exactly how the cap will work, but Osborne said the Office for Budget Responsibility would be told to issue a “public warning” if social security spending approached the limit set by the government.

If such a warning was issued, the government would “be forced to take action to cut welfare costs or publicly breach the cap”, which will be set for the first time at next year’s budget.

Osborne also announced that all those who lose their jobs will now have to wait for a week – rather than the current three days – before claiming out-of-work benefits. This will not apply to those claiming the contributory form of JSA and ESA, although the Treasury has yet to confirm if it will apply to income-related ESA.

And despite repeated claims by coalition figures such as Esther McVey, the minister for disabled people, that the government’s DLA reforms are not a cost-cutting measure, the new report stresses that the changes from DLA to PIP will “save £1.2 billion in 2015-16”.

Osborne said the series of extra savings he had announced would see another £4 billion cut from spending on benefits in 2015-16, on top of previous cuts of £18 billion a year.

He also announced that another £2 billion a year by 2015-16 would be transferred from the NHS into services commissioned jointly with local authorities, as part of moves towards a more “joined-up” social care and health system.

Debbie Jolly, a member of the steering group of Disabled People Against Cuts (DPAC), attacked the coalition’s “imposed savagery”, and said the spending round “sets up more horrors for anyone forced to rely on a diminishing welfare state”.

She said the spending round was certain to increase every aspect of “miseries” such as the “bedroom tax”, reliance on food banks, rising costs, and the increasing use of benefit sanctions.

And she said the further cuts to local authorities’ spending would push councils “beyond breaking point, increasing the already dire position of disabled people” faced by the closure of the Independent Living Fund, more “punitive strategies for claimants, more caps and more cuts to justice services for any effective redress”.